![]() She added that the main factor affecting the ruble was the fall in exports and rise in imports which has significantly shifted the supply-and-demand dynamics for the Russian currency in 2023. ![]() “Normally, a fall in the exchange rate leads to a fall in demand for imports, but that hasn’t happened,” Nabiullina said at a news conference in Moscow on why the ruble’s recent weakness is pushing up prices and worrying the central bank. The ruble has fallen from a high of 54 against the U.S. The Russian economy has largely performed better than expected since President Vladimir Putin ordered troops into Ukraine, bucking initial predictions that GDP could shrink by 10% and inflation spiral above 20%.Īnalysts credit this to the Central Bank’s introduction last year of strict capital controls, which reversed a collapse in the value of the ruble and, increasingly as the war has dragged on, billions of dollars of government spending on weapons, military equipment and salaries for soldiers.īut that extra spending, combined with the effects of Western sanctions and a collapse in Russian energy sales to Europe, have pushed the Kremlin into a $28 billion deficit in the first half of 2023. Current price growth rates, including a variety of underlying indicators, have exceeded 4% in annualized terms and are still increasing,” the Bank said in a statement. On Friday, the Bank said there was “persistent inflationary pressure in the economy” and raised its forecast for inflation this year to 5-6.5%.
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